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Entrepreneurship: Is It a Toy? Is It Art? Everyone Agrees It’s a Collectible

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Anonymous

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29th March 2017

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Larger figures are produced in limited editions, making them highly valuable to collectors. Smaller toys are often sold in blind packaging, similar to trading cards, giving the buyers an extra thrill of mystery. That has led to a trend called unboxing, in which excited fans open an entire case all at once in the hope of getting a rare figure and posting the frenzy on YouTube.

Video

Inside the world of collectible toys

NYT reporter Gregory Schmidt takes a tour of Midtown Comics in Times Square to look at collectible toys by Kidrobot and Funko. He talks with Brian Charles Rooney, an actor and avid toy collector, about the unboxing phenomenon, a trend that showcases fans unwrapping new products all at once for their online audience.

Publish Date March 29, 2017.

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Kidrobot, based in Boulder, Colo., is considered a pioneer in the field, having brought designer toys to the United States from Japan in 2002. But it has been overshadowed by Funko, a fast-growing toy company in Everett, Wash., that started out making bobbleheads in 1998 and wound up dominating the market for collectible toys.

Both companies make similar products, sometimes of the same character, like Batman, Bugs Bunny or Homer Simpson. But they have different business strategies, and neither thinks of the other as a rival.

Frank Kozik, the chief creative officer at Kidrobot, said he was grateful for the growth and attention that Funko has brought to the industry. “Funko has done the genre a huge favor,” he said. “Through their success, they opened the world to us.”

When Mr. Kozik came aboard at Kidrobot in 2014, the company was struggling with financial and leadership woes. The toymaker had stumbled after its founder and chief executive left in 2012. Without strong direction, sales were slumping, morale was suffering and employees were jumping ship.

“The company had lost its way,” said Mr. Kozik, who had been designing toys for Kidrobot before being hired by its new owner, a toy company called the National Entertainment Collectibles Association. Mr. Kozik aimed to lead Kidrobot back to its roots by working with young, urban artists to make designer toys with a whimsical edge.

Up-and-coming names like Tara McPherson, Amanda Visell and Nathan Jurevicius began customizing a prototype that Kidrobot calls a Dunny, street slang for “devil bunny,” creating a new work of art at an affordable price. (The Munny, on the other hand, is customized by the buyer.)

The Dunny concept has been used by other companies like Funko, Medicom, Tokidoki and Disney, which uses a Mickey Mouse form as its prototype for a line called Vinylmation.

But the real coup for Kidrobot came after the Andy Warhol Foundation for the Visual Arts agreed to give the company a license. To Mr. Kozik, who grew up in a punk rock scene, the Pop artist was a natural fit.

The success encouraged Kidrobot to broaden the line to include plush figures, Campbell’s Soup cans that contain mystery figures, and a higher-end reproduction of a Warhol artwork called “Invisible Sculpture.”

Kidrobot also puts its own twist on characters from Marvel and DC properties, as well as TV shows like “South Park” and “The Simpsons.” The mix of artistic and licensed properties helped Kidrobot turn profitable six months ago, Mr. Kozik said. He would not reveal sales numbers, but said the company was growing. He added that the company was able to bolster its workplace as well and now has nearly 20 employees.

Kidrobot still faces challenges. Its biggest risk will be a property of its own called Yummy World, a child-friendly line that it is developing for mass-market retailers, which means a greater investment and more inventory for Kidrobot.

Yummy World plush toys, key chains and other products are available now, and Mr. Kozik said Kidrobot was exploring the possibility of housewares and lifestyle products. “They are visually appealing and they have a tactile comfort too, like cuddling a kitten,” he said.

Funko, on the other hand, has fewer risks because it focuses primarily on licensed products, which tend to sell better at mass retailers. According to Brian Mariotti, the company’s chief executive, Funko typically handles 175 to 200 licenses at any given time.

Photo

Funko focuses primarily on licensed products, which tend to sell better at mass retailers. Brian Mariotti, the company’s chief executive, said Funko typically handled 175 to 200 licenses at any given time.Credit
Damon Winter/The New York Times

It prides itself on its awareness of entertainment blockbusters, making toys on a wide range of well-known properties like “Game of Thrones,” “Harry Potter,” “League of Legends” and “Star Wars,” and even a few unusual ones like “The Golden Girls” and Hanna-Barbera cartoons.

Funko recently announced that it acquired a license for “Rick and Morty,” an animated series on Cartoon Network, which it plans to use to expand beyond toys into housewares, home décor and apparel later this year.

Funko has 274 employees and maintains a design studio in the United States, cutting turnaround time. Mr. Mariotti said that Funko could get toys to retailers in as little as 70 days.

To shorten the window, Funko is considering new products that can be made in the United States instead of China. “We are much more effective with our quality control, overall design and speed to market by having this stuff designed all the way in the U.S.A.,” Mr. Mariotti said.

The fast turnaround is crucial for a toy company, said Jim Silver, chief executive of TTPM.com, a toy review website, because hot properties can burn out quickly. “You don’t know the life span of some of them.”

Funko has few worries about being squeezed by larger toymakers. Remaining agile helps it stay competitive, Mr. Silver said. “If you look at the cost of manufacturing and labor, overhead is a lot smaller for the smaller company,” he said. In fact, Hasbro and Mattel, two of the biggest toy companies in the world, license their properties to Funko.

Managing so many licenses has also attracted the attention of retailers, helping Funko move quickly into mass-market stores like Walmart, Hot Topic, Barnes & Noble and Target, which has a dedicated Funko area in most of its stores. Funko is also selling direct to consumers through a monthly subscription plan.

But the secret to the company’s success was not the number of licenses that it carried, but the devotion it had for each one, said Mr. Mariotti, who is a toy collector himself.

“We are 100 percent dedicated to everything we are excited about in pop culture,” he said.